CIE Accounting Paper-2: Specimen Questions 73 - 74 of 103

Passage

Singer and Dancer are partners sharing profit in the ratio of 3: 2. Their balance sheet on 31st March 2014 was as follows:

Singer and Dancer are partners sharing profit in the ratio

Find out ratio of amount

Liabilities

Amount

Assets

Amount

Singer’s Capital

32500

Bank

40500

Dancer’s Capital

11500

Stock

7500

Creditors

48000

Debtors - 21500

Less: Provision for doubtful debts - 500

21000

Reserve fund

13500

Fixed Assets

36500

105500

105500

On 31st March 2014, they decided to dissolve the firm and the following information was provided by them: (i) Debtors were realized at a discount of 5%; (ii) Stock at £7000; (iii) Fixed assets at £42000; (iv) realization expenses were £1500; (v) All the creditors were fully paid.

Question number: 73 (5 of 5 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

Will Singer and Dancer earn a profit or incur a loss, after the realization of their assets and paying their creditors in full?

Explanation

Realization Account in the books of Singer and Dancer as on 31st March 2014

calculate profit in given table

Particulars

Amount

Amount

Particulars

Amount

Amount

Assets transferred

Provision for doubtful debts

500

Stock

7500

Creditors

48000

Debtors

21500

Bank

Fixed assets

36500

Debtors

20425

Bank expenses

stock

7000

Creditors

48000

Fixed assets

42000

Realization expenses

1500

Profit transferred (Bal Fig)

Singer’s capital

1755

Dancer’s Capital

1170

2925

117425

117425

Profit = 2925

Singer = 2925 * 3/5 = 1755; Dancer = 2925 * 2/5

Debtors = 21500 – 5%= 21500 – 1075 = 20425

Passage

Susan Ltd was registered on April 1st 2011 with a capital of £10000000 divided into £1000000 shares of £10 each. The company offered 44000 shares of which 40000 shares were taken up by the public. £1 was received with application. On May 2nd these shares were allotted and by 31st may £2 per share was received as allotment money. First call of £3 per share was made on 30th June, and call money was received with an exception of 100 shares. Final call was made £4 per share and call money was received by 30th September with an exception of 400 shares.

Question number: 74 (1 of 5 Based on Passage) Show Passage

Essay Question▾

Describe in Detail

Classify the categories of share capital of Susan Ltd?

Explanation

In the case of Susan Ltd, the share capital can be classified as:

(i) Authorized share Capital: The maximum amount of capital which Susan Ltd can raise through the issue of shares.

(ii) Subscribed share capital: The monetary value of shares on which the public has shown interest to purchase.

(iii) Issued Share capital: This is the monetary value of shares which the company has issued to the interested public.

(iv) Called up capital: The monetary value which will be received on a later date on shares that have been issued to the public

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